In recent weeks, there has been a flurry of funding for later-stage semiconductor companies, such as Axelera AI’s $68 million series B raise and Black Semiconductor’s $275 million raise. In fact, global venture funding for semiconductor firms has seen $5.3 billion invested in 175 deals to date, which includes companies like Celestial AI, Recogni and Eliyan, according to Crunchbase data.

That is all great, but the challenge for early-stage companies has always been a funding gap—getting from that seed stage to series A, or what many around the world also call scaleup funding. The VCs are often not keen to come in early for a chip startup that may not even see early revenue until at least two years down the line. Which is part of the reason a majority of VCs have opted to go for software-based startups over the last 20 or so years—just because they can see a faster return on lower capital investment. The other dimension is that many funds focused on early-stage companies are not solely dedicated to chip startups.

So, the launch of a dedicated venture fund from Silicon Catalyst last month must be welcome news to budding chip startups. Called Silicon Catalyst Ventures (SCV), it is a fund put together by seasoned semiconductor industry veterans, with LPs being both large chip firms as well as family and is completely dedicated to investing in silicon and system startups.

EE Times had the chance to conduct an early interview with the fund’s team, and you can watch highlights of that virtual video conversation below:

SCV is a newly formed Delaware Series LLC that is deploying $10 to $20 million this year for its first series and is focused on investing in early-stage entrepreneurial teams developing transformative semiconductor-based innovations. It will fund companies primarily in North America, UK, EU, and Israel, and plans on investing in most early-stage companies admitted into the Silicon Catalyst incubator.

The close Silicon Catalyst relationship means the fund gets access to a pipeline of known companies who have been through the incubator program. For the cohort of companies on the incubator program, it gives them some assurance that if they are fit for funding further, there will be greater chance of getting funded.

The scope of SCV is to select and fund the most promising semiconductor startups addressing AI, communications, photonics, MEMS, sensors, IP, materials and life sciences. The investment team is led by founding managing director Shih-Wei Sun, former CEO of United Microelectronics Corporation (UMC), who joined Silicon Catalyst as an advisor and investor, as well as a member of the Silicon Catalyst Angels Investment group for the past two years.

He was not available for the interview, but general partners Laura Swan and Kai Chen spoke on the rationale for the fund and how its operational plan works, while Pete Rodriguez explained the bigger picture of what it means for Silicon Catalyst and its startups that come on its incubator program.

However, in a prepared statement, Shih-Wei Sun explained, “Silicon Catalyst Ventures was formed as an extension of Silicon Catalyst, the world’s only incubator and accelerator focused on semiconductor solutions. It has been formed primarily, but not exclusively, to fund and foster Silicon Catalyst portfolio companies. This close association between our fund and the Silicon Catalyst incubator affords investors unique access to startup teams whose technology and businesses are de-risked throughout a thorough and rigorous incubator screening process and then, when accepted, through Silicon Catalyst’s world-class two-year incubation. With our top-ranked semiconductor LPs, we bring additional ecosystem and supply-chain values to our startups. Silicon Catalyst Ventures is looking forward to tapping into the immense financial and societal value of our industry in this Silicon renaissance era.”

The initial SCV investments in companies from the Silicon Catalyst incubator include Applied Brain Research, Eridan Communications, Exokeryx, Owl Autonomous Imaging, Q-Pixel, RAAAM Memory Technologies, Salience Labs and Zepsor.

 ----Form EE Times